Rabat – Morocco’s central bank will start to issue approvals for Islamic banks by the end of this year and aimed for the banks to begin business operation in early 2017, announced Bank Al-Maghrib Thursday.

Representatives of the central bank said it had received seven requests to open Islamic banks and three to open windows selling Islamic finance products, Reuters reported. Two Gulf banks requested to establish fully owned subsidiaries while four others are partnering with local banks.

Lhassane Benhalima, the central bank’s head of banking supervision, said the Moroccan bank CIH is partnering with Qatar International Islamic Bank and Morocco’s CDG to establish an Islamic bank subsidiary.

Emirates NDB and Masraf Al Raya, Dubai’s largest bank and Qatar’s second-largest lender, respectively, have requested to open Islamic banking subsidiaries in Morocco, Benhalima said. Subsidiaries of French banks Societe Generale, Credit du Maroc, and BMCI, have only asked for permission to sell Islamic financial products, according to a Reuters report.

Islamic bank and insurers are setting up in Morocco, and the central bank has set up the Sharia Committee, a central sharia board with Morocco’s body of Islamic scholars, to oversee the new financial sector. The committee is tasked to monitor Islamic banking products and transactions to assure conformity with Islamic law.

Benhalima said the central bank has planned to form an Islamic interbank market and encouraged the government to issue regular sukuk (Islamic bonds) to ensure the industry’s liquidity, Reuters reported.

“We expect the treasure to issue the first sukuk [ever] in the domestic market in the coming months,” he said.

Local reports have suggested that there were plans to establish the first fully operating Islamic bank in 2016 since the government adopted legislation that allows Islamic banking and insurance in January 2014. Moroccan lawmakers have argued that there was “a delay in authorizing Islamic banks,” according to the Middle East Monitor.

The country’s experts believe establishing Islamic banks would pave the way for a new finance industry, open doors for more investment opportunities within and outside the region, and reinvigorate Morocco’s sluggish economy.

Islamic finance is based on religious principles that avoid interest and monetary speculation. The industry has grown rapidly over the past decade – growing at 10 to 12 percent annually, according to the World Bank – as it broadens its investor base across the Middle East and North Africa Region and Southeast Asia.

The industry has proven to emerge as an effective tool to fund worldwide development, including non-Muslim countries. Mainstream financial markets have discovered the industry’s potential to address international economic challenges, World Bank reported.

The World Bank and the General Council for Islamic Banks and Financial Institutions, the global umbrella of Islamic Financial institutions, signed a Memorandum of Understanding in July 2015 to enhance the development of Islamic finance worldwide and expand its investor base.